Stock exchanges are tightly knit clubs, and hardly anything has agitated their members more than the question of whether to let in the managers of mutual funds, pension funds, insurance companies and bank trust departments. By forming or buying brokerage subsidiaries that could trade on the exchanges, these institutional investors could save tens of millions of dollars every year in commissions. Many old-line brokers fiercely opposed institutional membership out of fear that they would lose commissions. Last week the Securities and Exchange Commission came out with a curious compromise: it ordered the exchanges to admit the institutions-but under conditions...
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